Typically, doctors and hospitals don’t report uncollected debts to credit report agencies. Rather, they turn their unpaid bills over to a debt collector and it is the collection agency that reports them. Did you know that just one collection account can cause a good credit score of a Patient or individual to drop 50 to 100 points?

Experian says “Medical Bill Collections Remain On the Report for Seven Years. Negative accounts remain on your credit report for seven years from the date they originally became delinquent. They are automatically removed once the seven year period is up.”

One DPC Physician writes “Remind patient that failure to satisfy debt constitutes theft of services / breach of contract, and the police will be contacted if you feel like it. Obviously, you will no longer EVER see this patient in your practice.”

Another DPC Physician writes “We have found that the 6 month commitment has given us the opportunity to communicate (and prove) that we are committing to them, so asking for that commitment from them becomes quite easy. Plus the financial barrier is less to interested members.”

Certainly, two very different approaches. One is soft and the other, well, abrasive to say the least. One welcomes relationship. The other, abruptly ends it before it really began.

If we are honest with our memories, we have all received some kind of PAST DUE notice, even from a Doctor. Today, they’ve become a necessary evil for those Doctors doing business and the Patient who is not as careful with their money as they probably should be.

What a ray of sunshine on a bright day. Maybe you forgot, maybe the invoice went to Spam.

When your medical office sends one of these dreadful notices that says something like ‘Your urgent attention is required. To prevent collection efforts and additional costs such as attorney fees, please remit payment in full…’ where is the relationship between the Patient and the Practice heading?

What is even crazier is to think we [e.g. the Patient] all sign-up for the next appointment in a traditional medical practice setting before we leave so we can start this [frustrating] process all over again?

Today, subscription-based business models and the recurring revenue that follows which is then generated by the DPC subscription fee is susceptible to natural attrition like any other business.

Age of the Patient panel is certainly a contributing factor today, especially as many DPC clinics run by a Physician are trending younger and younger. Marketing experts who help with patient acquisition in the past typically say most of your DPC subscribing patient panel will be within plus or minus 10 years of the Physician. For example, if the Physician is 43, approximately 80% of the past 18-24 months patient panel will be between the age of 33 and 53. Age groups think differently about subscriptions. For some, they want a Doctor for routine things. For most under the age of 49, people make consumer buying decisions based on price, not long-term value. Therein, lies the attrition problem. For some in DPC, ‘I’ll just pay you now …’ transaction charges are quite common and make up the most common methods of revenue. The ‘one and done’ visit where you never see the Patient again isn’t as uncommon as you might think. Why? The relationship between the Patient and the Doctor has not matured enough to the point where there is a ‘I know you, I like you and I trust you … and I’ll sign up for a monthly contract.’

Netflix reported an unexpected exodus of subscribers whose monthly membership rate rose after “grandfathered” rates expired. Maybe you have “grandfathered” Patients that are going to need an increase in the next year or two. How will you handle that?

For example, as a subscription service, each new month gives every Netflix users a chance to cancel the service. Sound familiar? Like all subscription companies, the best step Netflix can take to reduce churn is to create a great product that people are willing to pay for. Netflix for example accomplishes this by having a large library of original and licensed content. As long as people keep watching, they’ll keep paying.

Easy Pay Solutions, started in 1998 by two former VISA employees with the simple mission of helping providers and healthcare organizations collect payments from patients in a timely and cost effective way addressed the issue of collections below. Today, Easy Pay is used in thousands of medical offices. Here is what they had to say …

You’re Sending the Wrong Message

Sure, you’ve got your payment policies in place and even have signs posted at your front desk explaining the patient’s financial responsibility. But when was the last time you updated these policies? When was the last time you communicated them to your patients? Patients likely expect to pay a copay at the time of visit, as this is pretty commonplace at most practices, but what happens after the visit? Where do you display your policies for that?

If you haven’t updated your policies within your last year, you’re sending the message financial policies are more like suggested guidelines than requirements. So update your policies! Ensure that all of your staff is onboard to adhere to them and communicate them to your patients. Additionally, make sure you update office signage, as well as any electronic communications like your website, emails, and social media—it’s your responsibility that patients understand your policies before their visit.

Further, if your policies don’t include a section stating what payment requirements are enforced after the visit, you’ll want to fix that immediately as well. Most patients understand they’ll likely have to pay a copay at the time of visit, but often times they won’t know their insurance will cover afterwards, especially with more and more patients going on high deductible insurance plans. Health insurance can be complicated, so work with your patients so that everyone is on the same page.

‘Thank you’ are two words Doctors and their team members don’t say enough.

These two powerful words can encourage your Patient and significantly increase loyalty.

The one magical piece of paper in your practice that is understated and overlooked, the ‘Thank You’ Note.

True story from a Medical Practice in Ohio from just this week.

Just last week while talking with a Doctor from Ohio, we paused on this topic for a few moments. She said “Before I opened my [Concierge Medicine] practice I used to dread the calls to collect the unpaid payments in my practice. My staff hated those calls and even worse, knew that by sending out those letters, arguments would ensue. It was always a struggle. It created tension between my staff and my Patients. But today, it is much easier. The secret I discovered was I starting using ‘thank you’ notes. I know, it sounds silly. I wrote thank you notes to my patients. They were short and sweet and in some cases for the most random things.”

Personally, I have a goal of writing three thank-you notes a week. It’s a surprisingly simple and cost effective act of kindness.

A pattern-interrupt. Over twenty years ago I was taught the value of one piece of paper. The ‘THANK YOU NOTE.’ I chose embossed stationary with the initials of my first and last name, not the business or logo. I wanted something ‘more personal’ — less official. Despite the digital age, hand-written notes or cards will always be one of the simplest and best ways to say ‘Thank you’ because it’s personal and intentional.

You and I both know there is no ‘thank you’ from the medical practice down the street when you pay the bill before the deadline. And, we’ve probably never received a ‘thank you’ for paying that car payment on-time for the past several months. And, where is the fan-fare from the mortgage company for paying the bill, on-time, again, for the 32nd month in a row? Nothing, silence. Until, you’re a few days late.

In a recent conversation with a [DPC] Physician the other day we discussed the issue of unpaid membership subscriber fees for DPC services. The conclusion was made that If relationship is at the forefront of the DPC practice, why are so many Doctors sending the unpaid fees to collections? Is it because that is the only recourse? Is it because there is bad blood between the Physician and Patient? Is it a staffing issue? Is it because the Patient does not appreciate the value or service the Physician is providing? Or, if cost [e.g. membership fee] is at the forefront … nevermind, we’ve just answered our own question.

There is a disconnect between what the Patient wants from their Doctor and what the Physician feels is most important. No surprise here. This is a story as old as time. But, let’s unpack this specifically around the Cost vs. Relationship in DPC.

In January of 2018 we began to ask prospective patients seeking care from a subscription-based healthcare provider [e.g. DPC] across the U.S. to choose ‘Cost’ or ‘Convenience’ over ‘Friendship’ with a Doctor they know, like and can trust. Findings from this survey are telling us that 62% of Patients want and choose … ‘Friendship with a Physician they can get to know, like and want to trust!’

In Contrast, when Physicians are asked the same question, they ranked what they considered most important to their Patient which was Cost as most important (e.g. 46%) followed closely by Finding A Doctor I Know Like & Can Trust (e.g. 42%).

“I like the concept and I am having to leave my DPC physician I am with now,” said a Gen-Xer in our survey response.

It’s no surprise that even in Direct Primary Care (DPC) debt collection of any kind can cause your Patient panel to take a huge hit. Word can quickly spread that your more willing to send unpaid fees into collections and before you know it, you are losing Patients and patience.

“I have had more ‘bad debt’ cases than I would like,” said one Direct Primary Care Physician from Florida. “What I mean is patients cancelling their credit card on file and never returning our calls; therefore we are unable to assess what exactly happened (expectations not met?, financial issues? So therefore I have had to assume is lack of courtesy.”

The issue today we broach is marked by late notices, pay or else letters and is what we call [DPC] Patient subscriber churn. A common business phrase and somewhat of a conundrum for any DPC Physician. A number of factors play a part from age, demography, subscription price point and service. Each of these must find a balance for the practice to work well in the long-term.

A DPC Physician recently wrote, “We try to work with the patients but when their intention is clearly not to meet the financial obligations of DPC … then we kindly ask them to consider that the DPC model might not be a good fit for them. If they want to stay on as patients then I suggest another source of payment that would be more consistent. If there is still a trouble with lack of payment then we dismiss the patient.”

You’re Using Outdated Collection Technology

The best way to ensure that you receive your payments is to offer payment options upfront to avoid any confusion or complications later. However, if you’re using outdated technology, or focusing on sending out patient statements or making collection calls, this might not be possible.

However, credit card on file (CCOF) is an easy payment solution to implement and helps get the patient payment conversation started early. Offer your safe and secure CCOF payment option to ease into the conversation and making things easier for you and your patient.

Implementing CCOF will save your staff from spending their time hunting down unpaid balances, and will save your patients from spending their time trying to figure out the complicated medical billing process. Having a strong payment solution in place will also help you send the right message.

You’re Not Clearly Communicating a Future with Your Patients

This is a very common visit scenario for today’s patients: They come in for their once-a-year cold, get prescribed some medicine, and are sent on their way. And this is becoming even more common considering the availability of urgent care and retail clinics.

See the problem? Your patients, whether they’ve been with you for 10 years or 10 days, have options—especially when it comes to convenient care treatment. So if your patients can go to any doctor to receive care, how do you encourage them to stay with your practice?

This is a problem many practices aren’t even addressing. Providers will lose their patients, and payments, if they don’t take steps toward engagement and long-term, preventative care. Communicate with your patients about the benefits of being a patient at your practice. What will they get out of it in the long run?

A comprehensive, proactive health and wellness course is now easier to achieve because of the push for big data and interoperability in healthcare—regularly remind your patients that your practice is going everything it can to ensure their positive, long-term health.

These are a few of the biggest mistakes practices make that lead to issues when collecting payments. As the industry evolves, collecting from patients is becoming more complicated—but with strong policies in place, with new technology, and with patient-care strategies in place, your practice can be profitable and work toward future success, without worrying so much about your collections.

Every one of your Patients needs a small deposit of your time, over time. Take the time to care about what’s going on in their personal lives, and genuinely caring and remembering what they’re going through. Say this through a random act of kindness in a short note and snail mail it to them. This is important, not only because it creates a closer bond with your existing Patients, but also because it helps them help you. They are spreading the word about you to their friends, many of whom might not be a current Patient. And, as they do, they are helping build your practice.

Even still, with so many options to keep a Patient informed across nearly every type of device, DPC is continuing to test different services and price points. Just a couple of years ago, if a DPC monthly fee was higher than $99/pmpm it was considered Concierge Medicine [and in some social media circles, it still is …] and pronounced elitist and healthcare only for the wealthy. Today, DPC subscriber fees are rising by more than $20-50/pmpm to make the numbers work. Today, it is not uncommon to call around to a couple of DPC practices and hear age band prices from $120-$160+/pmpm. Are we now approaching Concierge Medicine territory?

DPC will continue to innovate and refine its price points and services to prevent churn and keep people healthy — and those Patients are at its [e.g. DPC] core on a quest for never-ending Patient experience. Bundling is coming too. More on that later this year. Either way, this is another chapter in the book of the price is right for DPC related to price increases.

In conclusion and in the spirit of thankfulness, let me take just a minute to thank you! I so appreciate that you take the time to read what we have to say, come to our FORUM and email and call us each and every week. I know there are a million different places to find information about practicing medicine, this and that and what not. So, THANK YOU for checking in with me from time to time. It truly amazes me.

Grateful and humbled,

~Michael | Editor-in-Chief

PS – What are your thoughts on DPC’s methods to keep your patient happy? Have you discovered new ways to connect and collect as a result of someones recommendations? Share your thoughts with us in the comments below!

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